KYC norms for self-help groups relaxed: RBI

RBI to ensure that members of Self-Help Groups (SHGs) are not
kept out of the ambit of banking services, the RBI said that banks can open
savings account for the SHG even if ‘know your customer’ verification is
completed for only the office bearers of the SHG. “In order to address the
difficulties faced by SHGs in complying with Know Your Customer (KYC) norms while opening savings bank accounts
and credit linking of their accounts, it has been decided to simplify certain
norms for SHGs,”

According to new
directives of RBI, it will not be mandatory for the banks to
complete the KYC of all members of the SHG before opening a bank account,
rather now, verification can be completed only for the office bearers of
the SHG.

The central bank also
clarified that the banks would have already completed the KYC norms
for the SHG while opening SHG’s bank account, there would be no need for a
separate KYC verification while giving credit to the SHGs.